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WCO Custom Brokers Guidelines

August 2017

Copyright 2017 World Customs Organization. All rights reserved. Requests ad inquiries

concerning translation, reproduction and adaptation rights should be addressed to

copyright@wcoomd.org

mailto:copyright@wcoomd.org

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Contents

I. Introduction .................................................................................................................................................. 4

II. Framework for Customs brokers.................................................................................................................. 5

a. Optional use ...................................................................................................................................................... 5

b. Licensing Criteria .............................................................................................................................................. 8

c. Scope of Practice ............................................................................................................................................ 11

d. Brokers’ Obligations and Liabilities ................................................................................................................. 12

III. Knowledge Base of Customs Brokers ....................................................................................................... 13

a. Requirements .................................................................................................................................................. 13

b. Management of Customs brokers examinations ............................................................................................. 14

IV. Brokers’ Compliance and Performance Management ............................................................................... 15

a. Key Principles ................................................................................................................................................. 15

b. Compliance Measurement .............................................................................................................................. 20

V. Trade Facilitation and Cooperation between Customs and Brokers: Building Trust while Improving

Efficiency and Compliance ......................................................................................................................... 21

a. Memorandum of Understanding ...................................................................................................................... 21

b. Transparency Agreement ................................................................................................................................ 22

c. Broker –Trader Vetting .................................................................................................................................... 22

d. Trusted Partners - AEO programme ............................................................................................................... 22

VI. Brokers’ Code of Ethics.............................................................................................................................. 23

a. Codes of Conduct ........................................................................................................................................... 23

b. Agreements between Customs Brokers and their Clients ............................................................................... 25

c. Industry Guidelines and oversight ................................................................................................................... 26

VII. Fees and Charges ....................................................................................................................................... 26

VIII. Capacity Building ....................................................................................................................................... 27

a. Knowledge Management ................................................................................................................................ 27

b. Professional Development .............................................................................................................................. 29

c. Joint Training .................................................................................................................................................. 29

d. Key elements of a capacity building framework .............................................................................................. 29

e. Administrative Structure/Policies and Procedures .......................................................................................... 30

f. Training Customs officials in the practical application of Customs broker regulations .................................... 32

g. Evaluating a Customs Broker Management Mechanism................................................................................. 34

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IX. Stakeholder Engagement: The Structure and Role of Customs Brokers’ Associations ........................... 34

X. General Guidelines - Customs Broker Regime .......................................................................................... 36

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I. Introduction

1. Customs brokers1 generally act as an intermediary between traders and Customs in

Customs clearance processes. Brokers’ knowledge of Customs laws and processes in

addition to their work experience in the trade supply chain can be useful for both traders

and Customs. While brokers support traders by providing all necessary documentation

and undertaking formalities related to cargo clearance, Customs brokers are also

expected to maintain government interests by ensuring compliance with Customs and

other regulatory requirements and the collection of appropriate duties and taxes.

2. In line with ongoing Customs reforms and to further enhance their service delivery, some

Customs brokers are transitioning towards a more comprehensive consultancy and

advisory role, rather than being confined to merely submitting declarations/documents for

Customs release and clearance. They also collaborate with other actors in the supply

chain on behalf of traders, such as port/terminal operators, freight forwarders,

carriers/agents, warehouse operators and transporters. In some cases, brokers have even

expanded to provide many other services in the supply chain, such as cargo handling,

warehousing, multi-modal transport carriage, packaging, consolidation, insurance

coverage, delivery services, as well as providing consultancy in compliance and dispute

resolution.

3. With accession to the RKC, more and more Members are making the use of a Customs

brokers’ service “optional”. However, mandatory use of licensed brokers’ services is still

prevalent in many countries, for example in the WCO Americas/Caribbean Region or in

some African countries, the latter following rules stipulating that only licensed brokers are

allowed to process all import/export clearance, except for some specified goods.

4. In contrast to mandatory broker regimes, other countries follow free market principles

where the engagement of Customs broker services or otherwise is the commercial

decision of the trader. Cost effectiveness and quality of professional service based on free

market principles are key factors influencing such a decision.

5. There are varied licensing and regulatory models adopted by Customs administrations to

authorize legal and/or natural persons to act as Customs brokers. Many administrations

have specific licensing requirements allowing a party to act as a broker, while others

simply allow anyone to establish a free business and take up the job of a clearing agent on

behalf of others.

6. Some Members permit a licensed Customs broker as an individual to operate and practise

his/her profession without having any linkage to a Customs brokerage entity, whereas

some others only allow the licensed brokerage entity to carry out such activities. In some

1 The WCO “Glossary of International Customs Terms” defines the Customs clearing agent as a person who carries on the business

of arranging for the Customs clearance of goods and who deals directly with the Customs for and on behalf of another person. 1. Examples of Customs clearing agents are Customs agents, Customs brokers and freight forwarders. 2. Some countries require that Customs clearing agents or Customs brokers be approved or licensed by Customs. 3. See also the term “Third party” (Chapter 2 of the GA to the Revised Kyoto Convention).

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cases, a periodic (such as annual, five or ten years) renewal/validation of the licence is

required, while in other cases the licence remains valid until suspended/revoked on

specific grounds. Some administrations issue port-specific licences and identity cards to

brokers to transact business. They need to have an identity card and/or endorsement of

their licence for each of the ports where they want to transact business.

II. Framework for Customs brokers

a. Optional use

7. The Revised Kyoto Convention (RKC) makes the usage of Customs broker services

“optional” for the importer/exporter. Standard 8.1 of the General Annex (GA) to the RKC

provides that persons concerned shall have the choice of transacting business with

Customs either directly or by designating a “third party” to act on their behalf. Standard 8.2

to the GA to the RKC calls for the national legislation to specify the conditions for persons

to act as third parties and to stipulate their liability for any duties and taxes and for any

irregularities in compliance with Customs requirements. It further stipulates that licensing

requirements for Customs brokers should be transparent, non-discriminatory and

reasonable.

8. Standard 8.3 of the GA to the RKC requires Customs not to impose more stringent

requirements on anyone preferring to deal directly with Customs rather than employing a

third party for any particular transaction or in general. Additionally, Standard 8.4 states that

a person designated as a third party shall have the same rights as the person who

designated him in those matters related to transacting business with Customs.

Box 1. Chapter 8 of the GA to the RKC

8.1. Standard

Persons concerned shall have the choice of transacting business with the

Customs either directly or by designating a third party to act on their behalf.

8.2. Standard

National legislation shall set out the conditions under which a person may act

for and on behalf of another person in dealing with the Customs and shall lay

down the liability of third parties to the Customs for duties and taxes and for

any irregularities.

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8.3. Standard

The Customs transactions where the person concerned elects to do business

on his own account shall not be treated less favourably or be subject to more

stringent requirements than those Customs transactions which are handled

for the person concerned by a third party.

8.4. Standard

A person designated as a third party shall have the same rights as the person

who designated him in those matters related to transacting business with the

Customs.

8.5. Standard

The Customs shall provide for third parties to participate in their formal

consultations with the trade.

8.6. Standard

The Customs shall specify the circumstances under which they are not

prepared to transact business with a third party.

8.7. Standard

The Customs shall give written notification to the third party of a decision not

to transact business.

9. Further, Chapter 3 of the General Annex to the Revised Kyoto Convention sets out

standards regarding the declarant. Standard 3.6 stipulates that national legislation must

prescribe who is entitled to be a declarant and the conditions under which the person can

act as a declarant. Standard 3.7 provides that any person who has the right to dispose of

the goods can act as declarant. The RKC Guidelines go on to state that in order to

facilitate trade, this should not be taken as referring solely to the owner of the goods, but

should be interpreted as broadly as possible, in accordance with national legislation, to

include third parties acting on behalf of the owner such as the carrier, the consignee, a

forwarding agent or a Customs broker, express courier in door-to-door services, etc.

10. The RKC clearly set out that the use of brokers should not be mandated by

Customs/governments; rather it should be determined by market forces and offered as a

choice to traders.

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Box 2. Chapter 3 of the GA to the RKC

3.6. Standard

National legislation shall specify the conditions under which a person is

entitled to act as declarant.

3.7. Standard

Any person having the right to dispose of the goods shall be entitled to act as

declarant.

11. Article 10.6 of the WTO Agreement on Trade Facilitation (TFA) provides that, from the

entry into force of the Agreement, Members shall not introduce the mandatory use of

Customs brokers. Article 10.6 of the WTO TFA also requires that Members shall apply

transparent and objective rules for licensing.

Box 3. Article 10.6 of the WTO TFA

Use of Customs Brokers

6.1 Without prejudice to the important policy concerns of some Members that

currently maintain a special role for customs brokers, from the entry into force

of this Agreement Members shall not introduce the mandatory use of customs

brokers.

6.2 Each Member shall notify the Committee and publish its measures on the

use of customs brokers. Any subsequent modifications thereof shall be

notified and published promptly.

6.3 With regard to the licensing of customs brokers, Members shall apply

rules that are transparent and objective.

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b. Licensing Criteria

12. Licensing requirements for Customs brokers, where applicable, vary from one country to

another and depend on national legislation and domestic needs. Members’ licensing

requirements broadly include a combination of the following: sound knowledge of Customs

and other laws relating to border regulatory requirements, knowledge of trade-related

transport and finance matters, demonstrated compliance record (clean track records in

terms of security and other compliance matters), financial capacity or solvency, minimum

educational qualification, minimum work experience, in some cases a written and/or oral

examination and even a minimum number of hours of training, electronic transmission

capability, financial guarantee (surety bond, security deposit), and being incorporated or

established in the country/citizenship or residency. Some other requirements range from

an oral interview or knowledge of the national language to the moral character of the

applicant. The reasoning behind these requirements is to secure duties and taxes as well

as to ensure continued compliance with Customs and other regulatory requirements.

13. By obtaining a licence/permission through a specified process, Customs brokers are

allowed to practise while enabling Customs administrations, or relevant licensing

government agencies, to have a complete list of brokers with verified credentials.

Audits/checks of this list of registered Customs brokers at prescribed intervals ensure that

those who are licensed are maintaining their standards and administrations can, therefore,

focus on those brokers with a poor compliance record.

14. The first aspect to consider is who should be responsible for meeting the Customs broker

licence requirements. Options include the regulation of individuals, the regulation of

businesses with or without specified requirements for qualified individuals or some

combination thereof.

15. What are the criteria that should be met before a licence is issued? It is critical that such

criteria be completely objective, transparent, non-discriminatory, and measurable. There is

no merit in establishing subjective criteria or criteria subject to interpretation since these

can lead to a lack of transparency and an unfair application. Where Customs brokers are

regulated/licensed, there should be a standard list of criteria.

16. In some countries, requirements are imposed only on those who provide services as third

parties while in others there are also requirements that apply to individuals who perform

services on their own behalf or that of their employers.

17. Additionally, imposing conditions concerning conflict of interest might be favoured as a

policy option. A Customs Administration should not permit its employees, while employed,

to operate or be employed by a Customs brokerage business. They may wish to go further

and impose conditions relating to the control or direction of partnerships or corporations or

importing or exporting businesses that prohibit Customs Administration employees from

participating in such activities. A Customs administration may allow its employees to carry

out broker activities only after a specified number of years of their retirement or resignation

from service.

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18. For business entities, operating as Customs brokers, evidence of financial stability (the

past and current financial statements) should be provided. In addition, in cases where

payment will be made on behalf of their clients, Customs brokers should typically provide a

financial guarantee or security deposit in accordance with requirements set out in

legislation or regulation.

19. Some fundamental principles and examples for licensing individuals and businesses as

Customs brokers are set out below :

20. An individual is qualified for a licence if the individual,

- meets the knowledge requirement and has passed the Customs broker licensing

examination with a grade of minimum specified percentage,

- has two years of experience working for a licensed Customs broker,

- has sufficient financial resources to conduct business in a responsible manner,

- has electronic transmission capability (where required) - Customs Broker Automated

Systems should be able to interface with Customs/government systems,

- is eligible to meet or has met the country’s business registration requirements.

21. A partnership, when composed of individuals, is qualified for a licence,

- if one of the individuals meets the knowledge requirement and has passed the Customs

broker examination with a grade of minimum specified percentage,

- if the partnership has sufficient financial resources to conduct business in a responsible

manner,

- if none of its partners is bankrupt,

- if none of its partners has been found guilty within the previous three years (or any other

specified period) of any violation of any legislation relating to importation or exportation,

- has electronic transmission capability (where required) - Customs Broker Automated

Systems should be able to interface with Customs/government systems,

- if eligible to meet or has met the country’s business registration requirements.

22. A partnership, when composed of corporations, is qualified for a licence if at least one of

the corporations is qualified for a licence.

23. A corporation is qualified for a licence

- if the corporation has at least one employee who meets the knowledge requirement and

has passed the Customs broker examination with a grade of minimum specified

percentage,

- if the corporation has sufficient financial resources to conduct business in a responsible

manner,

- if a majority of its directors are citizens or permanent residents of the country,

- if it is incorporated in the country,

- if none of its directors is bankrupt,

- if none of its directors has been found guilty within the previous three years (or any other

specified period) of any violation of any legislation relating to importation or exportation,

- has electronic transmission capability (where required) - Customs Broker Automated

Systems should be able to interface with Customs/government systems.

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24. In growing digital economy, Customs brokers are deeply involved in, and dependent upon,

the automated systems that drive efficiency, speed, accuracy, standardization, and

compliance. Therefore, the requirement for a robust Customs Broker Automated System

that is capable of interfacing with Customs/government systems is a critical element in the

overall clearance process, especially in a Single Window environment.

25. The following are detailed practices relating to possible licensing criteria, which may be

considered, as appropriate :

Application for Licence

26. The process of issuing licences must be efficient, transparent and fair. In designing a

process for the issuance of licences, the Customs Administration must consider the

resources associated with the various options and it must consider partnerships with

others who could play a role in the investigation/verification and registration processes. In

some countries, the investigation/verification process requires the involvement of law

enforcement authorities. Coordination with the business registration authority might also

be a useful consideration.

27. The application for a licence should include the following information :

- Where the applicant is an individual,

o the applicant’s full name

o the business name and address.

- Where the applicant is a partnership composed of individuals,

o the full name of each partner

o the names of the partners who have passed the Customs broker licensing examination

and maintained their qualifications

o the business name and address.

- Where the applicant is a partnership composed of corporations,

o the legal name of each partner

o the head office address of each partner

o the name of each officer and the directors of each partners

o the names of the officers of each partner who have passed the Customs broker licensing

examination and maintained their qualifications

o the business name and address.

- Where the applicant is a corporation

o the legal name of the corporation

o the head office address of the corporation

o the name and address of each officer or director

o the name of each officer who is a Customs specialist

o the names of the officers who have passed the Customs broker licensing examination

and maintained their qualifications

o the business name to be used if other than the legal name of the corporation.

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Licensing Fees

28. Typically, a non-refundable application fee must accompany the application filed with the

Customs Administration.

Investigation/Verification of the Applicant

29. An investigation will ascertain facts relevant to whether the applicant is qualified including

consideration of the accuracy of information provided in the application.

Issuance of Licence

30. Where all Customs broker licence requirements have been met, the designated Customs

Administration officer will issue a Customs broker licence and publicize its issuance.

Business Registration

31. A holder of a Customs broker licence must be registered as a commercial entity in

accordance with the laws and regulations of the country.

Denial of Licence and Appeal

32. If the Customs Administration finds that a licence should not be issued, written notice of

the decision providing reasons should be provided to the applicant. The applicant, whose

licence application has been refused, should have a right to appeal that decision to an

appellate authority or tribunal before approaching a court of law.

c. Scope of Practice

33. The function of a Customs broker also varies greatly among Members. The scope of their

service is normally determined by licensing/regulatory frameworks and conditions laid

down therein and as agreed between the trader and the broker. It encompasses a wide

spectrum of activities, notable among them are : the preparation of documents related to

release and clearance on behalf of traders; submission of declarations and other

information to Customs and other government agencies; payment of duties and taxes on

behalf of traders; samples before the lodging of a Customs declaration; dealing with

refunds and adjustments on behalf of traders; accounting of goods and the entry of

goods; liaising with other government agencies for licences, permits and other

requirements; assistance in post clearance audits; representation of clients in dispute

resolutions; consultancy/advice to traders in meeting various regulatory requirements.

34. The scope of practice generally relates to services that require knowledge and skills best

acquired through education and training and where performance of these services by

persons without such knowledge and skill can cause harm (financial or otherwise) to

traders and Customs alike. The purpose of the scope, in this instance, is to determine

which specific services can be offered only by licensed Customs brokers.

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35. The following is a list of services that could be specified within a licensed Customs broker

scope of practice:

a. Preparation of import, export and warehouse documents required by Customs

and other government agencies,

b. Completion and submission of Customs declarations for import, export and

transit,

c. Completion and submission of Customs declarations related to warehousing,

d. Completion and submission of other import or export documents or data required

by government authorities,

e. Payment of duties, taxes and other regulatory charges and fees on imports and

exports,

f. Arranging and being present for the examination of goods by Customs authorities

and other government agencies,

g. Filing of duty and tax refund requests and amendments to Customs declarations.

h. Consultation on matters relating to classification, valuation, and determination of

origin for imports and exports and on matters relating to government

requirements for imports and exports.

i. Maintenance of records and supporting documents and data relating to import,

export, and transit transactions as required by law.

36. Any person who intentionally transacts business within the specified scope of practice, as

a third party without complying with the licensing/regulatory requirements, should be liable

for administrative and penal proceedings.

d. Brokers’ Obligations and Liabilities

37. While performing several activities on behalf of traders, licensed Customs brokers, where

applicable, have to meet several obligations and liabilities depending on the national

legislation and regulations of the country in which they are licensed.

38. Some administrations also prescribe certain licensing obligations for brokers in respect of

business ethics and professional conduct; due diligence towards clients; and/or accuracy

of information provided.

39. Normally, licensed Customs brokers may act only under the proper authorization or

agreement from/with the trader within the licensing/regulatory framework. Some of their

obligations and responsibilities are :

to ensure compliance with Customs and other regulatory requirements,

to advise their clients on various compliance requirements,

to take reasonable measures to follow ‘Know Your Customer’ (KYC) principles, including the verification of track record and identity of his client,

to exercise due diligence to ascertain the correctness of any information and not submit or procure or assist in the filing of any claim, or of any document, known by the broker to be false,

to be liable (jointly and severally) for the payment of duties, taxes and other charges on behalf of their clients,

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not attempt to influence the conduct of any official concerning any matter pending consideration,

not allow his licence, permit or name to be used by or for any unlicensed person (including a broker whose licence or permit is under suspension), other than his own employees authorized to act for him, in the solicitation, promotion or performance of any Customs business or transaction,

not procure or attempt to procure directly or indirectly, information from Government records or other Government sources of any kind to which access is not granted by the proper authority,

to maintain and preserve records relating to his representation for a specified period of time for Customs audit/inspection,

to maintain high professional standards, transparency, efficiency, and business ethics,

to discharge his duties with the utmost speed, efficiency, and integrity, ensuring a high level of service delivery standards,

to cooperate with Customs and other government agencies in improving compliance,

to meet all terms and conditions, mentioned in the contract between the Customs broker and the trader.

III. Knowledge Base of Customs Brokers

a. Requirements

40. The benefits that arise from the work carried out by Customs brokers and the value offered

to traders in the efficient clearance of goods and to the Custom Administration and other

government agencies in terms of ensuring compliance with all regulatory requirements as

well as the collection of legally due duties and taxes largely depend upon a specialized

education and professional development programme that –

i. enhances the rate of compliance with national import and export requirements, including revenue collection and safety and security requirements,

ii. ensures that the services provided to importers/exporters are of value in helping them meet both their business needs and their Customs and other regulatory obligations, and

iii. contributes to the efficiency of the cross-border movements of goods.

41. Those providing Customs broker services must have knowledge of the following (but not

limited to) :

i. Principal legislation, regulations, and policies governing the import and export of goods, ii. the Harmonized Tariff Classification System,

iii. Tariff Treatments and Trade Agreements,

iv. Valuation, v. Product quality, vi. Origin - Marking of Goods, vii. Corrections and Refunds/Adjustments,

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viii. Goods requiring permit/certificates and Prohibited Goods, ix. Anti-dumping and countervailing duty, x. Reporting, releasing and formal entry of goods, xi. Payment of duties and taxes, xii. Export procedures including drawback,

xiii. Data and documentary submission requirements, xiv. Other regulatory requirements, xv. Border procedures of neighbouring countries and major trade partners, xvi. Ethical business practices.

42. If the provider of Customs broker service is a business entity, additional knowledge

requirements would include :

i. Licensing legislation/regulation and related rules/procedures,

ii. Agency and other contractual agreements, iii. Financial Management, iv. Human Resource Management,

b. Management of Customs brokers examinations

43. An examination (oral and/or written) as part of licensing requirements of a Customs broker

is a useful process to test the knowledge of the applicants. This examination can act as an

initial screener of Customs brokers, which could increase compliance rates because of the

level of knowledge of Customs and other related laws and procedures required to pass the

examination. One option could consist of Customs administrations, Customs brokers

associations, and other relevant government agencies working together to produce a

comprehensive examination system that would evaluate the knowledge of the applicants

on all applicable laws concerning Customs clearance, declaration, and requirements as

well as those of other relevant agencies.

44. Generally, the responsibility for the examination’s content and organization should lie with

the Customs administration, as it is the the most competent border agency when it comes

to the clearance of goods, conveyances and people. However, in a few countries other

government agencies, brokers associations or bodies comprising representatives from

Customs and brokers associations and the private sector are responsible for organizing

such examinations.

45. When taking decisions regarding the organization of Customs brokers’ examinations, the

way in which the courses are developed and delivered must be taken into consideration. A

Customs Administration may choose to develop and administer the examination(s) in-

house or it may choose to outsource or a combination thereof. Should the examinations be

organized by a party other than the course content developers in partnership with

experienced knowledge assessment designers, sufficient caution should be exercised to

ensure that the examination fairly evaluates the candidate’s knowledge in line with the

curriculum? The administrator of the exams also must be able to conduct the exams in a

fair and accessible manner suited to the delivery method selected, whether they be in-

person, online, written, oral or both or some combination thereof. There should be a link

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between the format of the examination and the way in which it is marked: resources

available for marking must be taken into consideration when deciding on the format of the

examination and marking must be done in line with the format of the examination and must

reflect integrity across the whole process.

46. The Customs Broker Licensing examination can also be developed in collaboration with

the association representing Customs brokers, where one is in place and offered on a

regular, scheduled basis. Notice of the time and place of an examination should be posted

on the website and in the public areas of Customs checkpoints not less than 60 days

before the date of the examination. If a fee is needed to take the examination, it should be

processed along with the application. Examination results should be provided to

candidates in writing within a specified time period following the examination.

Proof of Financial Stability

47. Where there is no provision for release of goods prior to payment, the applicant should

provide the Customs Administration with proof of sufficient funds to set up operation as a

Customs broker. Where release prior to payment is permitted, the Customs broker should

deposit a financial security with the Customs Administration in order to protect the

Customs Administration against any loss related to non-payment of monies owing on

imported or exported goods. The security deposited can be in any approved form

including cash, a certified cheque, a surety bond or a bank guarantee.

IV. Brokers’ Compliance and Performance Management

a. Key Principles

48. Once licensed/authorized as applicable, a Customs broker has obligations that must be

met for in order to retain its licence. In most countries, Customs brokers rely on the data

provided by the importer or exporter to complete the import or export declarations. As

such, it is the importer or exporter who is liable for the accuracy of the information

submitted to Customs. However, this does not mean that the Customs broker is without

responsibility for its interactions with the Customs Administration.

49. A proper regulation of Customs brokers does not end with the issuance of a licence. How

can the Customs Administration ensure that knowledge and performance standards are

maintained and that the quality of work performed by Customs brokers continues to be

based on up-to-date knowledge of current laws, procedures and other requirements?

What rules can be put in place to assure clients that their Customs brokers have the

necessary knowledge and resources to properly transact Customs business on their

behalf?

50. In some countries, after the initial licence issuance, there is no management by Customs

of requirements for Customs brokers beyond payment of a licence renewal fee,

maintenance of appropriate levels of financial security, updating changes in contact

information and timely payment of duties and taxes on behalf of their clients. Suspensions

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and cancellations are resorted to only in extreme cases where there has been a

successful criminal prosecution of a Customs broker. In other countries, there are

requirements relating to ongoing professional development/continuing education for the

key personnel in Customs brokerage firms. And in yet others, there are requirements that

key personnel put a concept known as “responsible supervision and control” into place

within their Customs brokerage operations.

51. Those responsible for the ongoing regulation of Customs brokers should consider

establishing national standards of professional practice that protect client and Customs

Administration interests while actively acknowledging that the knowledge and skills

required in Customs brokerage are best acquired and developed through ongoing

professional development including courses, seminars and events provided by brokers

associations as well as corporate in-house training, informal on-the-job training activities,

and tertiary education at recognized national education institutions. Additionally, continued

financial stability and Customs compliance (measurable standards) should be evident. In

the case of the latter, such standards would be based on various aspects of a Customs

Administration’s laws, policies and practices.

52. The following are examples of good practice relating to Customs broker regulation :

Licence Display

53. A Customs broker should display his licence at his business premises and provide

evidence of it on request.

Terms and Conditions

54. A Customs broker must maintain the eligibility conditions that were met at the time of

issuance of licence.

Notification of Changes

55. A Customs broker should immediately notify in writing the designated Customs

Administration officer of any change -

in the address of a business office at which he transacts business as a Customs broker,

in the legal or business name of the partnership or the corporations, where the Customs

broker is a partnership or a corporation,

in the membership of the partnership, where the Customs broker is a partnership

in the officers or directors of the corporation, where the Customs broker is a corporation,

in the ownership of the business or corporation, where the Customs broker is an

individual or corporation.

Financial Security

56. A Customs broker must maintain sufficient financial resources to conduct business as a

Customs broker.

57. Where release prior to payment or other security is required, a Customs broker must

continue to provide evidence that an adequate level of security is still in place.

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Diligence in correspondence and paying monies

58. A Customs broker must exercise due diligence in responding to correspondence, making

payments, reporting to clients regarding any funds received for the client from the

government as well as provide to the importer or exporter sufficient evidence of each

transaction made on their behalf, including evidence of financial transactions

False Information

59. A Customs broker must not file or assist in the filing of any declaration or other document

known by him to be false.

Advice to clients

60. A Customs broker must not withhold information relating to any Customs business from a

client who is entitled to that information. A Customs broker must exercise due diligence to

ascertain the accuracy of any information which he imparts to a client, and he must not

knowingly impart false information to a client.

61. If a Customs broker knows that a client has not complied with the law or has made an

error in, or omission from, any document or other paper which is required by law, he must

advise the client promptly of that noncompliance, error or omission and assist him with the

rectification process as laid down by the law.

62. A Customs broker must not knowingly suggest to a client or prospective client any illegal

plan for evading payment of duty or other financial obligations to the Customs

Administration.

Supervision and Training

63. Where a Customs broker employee has not met the Customs broker knowledge

requirements and is conducting Customs business, his work must be directly supervised

by an individual who has met those requirements.

64. A Customs broker must maintain a list of all employees engaged in transacting Customs

business.

Record Keeping

65. A Customs broker should maintain the following information :

Records indicating all financial transactions made while transacting business as a

Customs broker

Copies of all documents relating to those transactions including all correspondence, bills,

accounts, statements, invoices and other papers received or prepared by the Customs

broker that relate to his business as a Customs broker

Copies of powers of attorney authorizing the Customs broker to act on an importer’s

behalf.

66. Records should be kept for a specified period of time after the importation or exportation of

the goods to which the information relates.

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67. The information should be kept in such a manner as to enable a Customs officer to

perform detailed audits and to obtain or verify the information.

68. The information required may be kept in an original document, a photocopy or

electronically if the media can be related back to the supporting source documents and are

stored in a system capable of producing accessible and readable copies.

69. Client records are to be considered confidential and the Customs broker must not disclose

their contents to any person other than the client concerned and any duly authorized

officers of the Customs Administration, except on legal subpoena.

70. Customs brokers should not, without justifiable grounds, divulge or misappropriate any

confidential information which they have learned during the course of conducting their

Customs brokerage business.

Warnings, Monetary Penalties, Cancellation or Suspension of Licences and Licence

Renewal Refusals

71. Customs administrations should establish penalty and sanction regimes for non-

compliance/violations/misconduct by Customs brokers. Such regimes include

censure/advisories/warnings, suspension, termination, fines/penalties, and prosecution.

72. Each Customs Administration must consider the conditions under which it will issue

administrative censure/advisories/warnings, impose monetary penalties, and suspend or

cancel a licence. It must design the process that will be followed in order to determine

whether an administrative warning, monetary penalty, suspension or cancellation is

required as well as how the related appeal process will be managed. Information must

also be published about how disciplinary proceedings and appeals are conducted and who

will be involved in proceedings.

73. As a minimum, a list of potential offences and penalties should be published with the

policy makers considering the inherent and relative severity of each offence in terms of

national law and in terms of its impact on clients of Customs brokers. This list should be

periodically updated.

74. The Customs Administration may wish to establish a committee to review any complaints

or offcences. In some jurisdictions, the Customs Administration invites private sector

representatives to be part of this process, although the highest levels of confidentiality

must be maintained.

75. An appeal process should be in place and should not involve those who made the original

decision although their decision-making process will be important to understand. Hence,

the decision-making process should require the issuance of a detailed reasoned order.

76. Decisions not to renew licences should be taken as a result of a regularly scheduled

review of each Customs broker. The review should be based directly on the Customs

broker licence maintenance requirements.

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77. The following are some more detailed examples of good practice in licence suspension

and renewal that may be considered, as appropriate :

Voluntary suspension

78. Where a Customs broker wishes to cease transacting business as a broker for a

temporary period, a request for a voluntary licence suspension may be submitted to the

Customs Administration. The Customs Administration may accept the voluntary offer of

suspension for a specific period of time under any terms and conditions that may be drawn

up and agreed to.

Grounds for suspension or cancellation

79. A licence may be suspended or canceled if the Customs broker:

has contravened the provisions of a law or regulations relating to the importation or

exportation or transit of goods,

has acted to defraud government authorities or a client,

has granted a Customs broker licence, documents or statements under false pretences,

has suggested a plan for evasion of any duties, taxes or other charges owed to the

government that involved the contravention of any laws or regulations,

has failed to comply with the Customs broker regulations,

becomes insolvent or bankrupt,

has engaged in dishonest conduct while transacting business as a Customs broker,

ceases to carry on business as a Customs broker for a specified period or failed to carry

out his duties and responsibilities as a Customs broker in a competent and professional

manner maintaining business ethics,

is no longer qualified under these regulations.

Cancellation measures and conditions

80. Before a licence is canceled or suspended, the designated Customs Administration officer

will normally provide written notice to the Customs broker in advance of the proposed

suspension or cancellation, except in situations (which may be specified) warranting

immediate action.

81. Relevant information concerning any allegations or with respect to any of the grounds on

which the proposal to suspend or cancel the licence are based should be provided to the

Customs broker affording them an opportunity to explain in writing and/or orally during a

personal hearing.

Appeals

82. A Customs broker whose licence has been suspended or canceled or whose licence

renewal has been refused may, within a specified period (e.g., 30 days) of receipt of the

written notification of such decision, appeal to the designated appellate authority.

83. When a licence is suspended, cancelled or when a licence renewal is refused, and there is

no appeal of that suspension, revocation or refusal within the prescribed time-limit or if the

appeal has been made and dismissed, the Customs Administration should publish notice

of the suspension or cancellation on its website and in the public areas of Customs border

points.

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Surrender of Licence

84. Customs Administrations must have a procedure for accepting notification of a

surrendered licence where a Customs broker has ceased to transact business as a

Customs broker.

Unlicensed brokers

85. In order to prevent Customs brokers from being able to lend their licence and signature to

other brokers or to a third party not licensed/authorized to act as a broker, Customs

Administrations could establish a system by which whoever has the legal power to dispose

of the goods (owner, consignee, etc.) grants authorization to their Customs broker to be

represented before Customs in order to process their Customs operations. Moreover,

Customs brokers associations should incorporate measures into their codes of ethic,

which allow Customs brokers indulging in such activities to be sanctioned. Encouraging

business chambers, especially those representing importers and exporters, to know the

Customs brokers they operate with is also considered a positive mitigating factor.

b. Compliance Measurement

i. Merit System

86. A brokers compliance level can be assessed on the basis of a ‘Merit System’ to reward

compliant brokers, for example, an AEO scheme for brokers. Customs administrations can

carry out a study to rank Customs brokers on the basis of their compliance and service

delivery to promote compliance. Additionally, Customs administrations can measure the

compliance rates of traders who use a Customs broker against those who do not, and

compare release times of consignments for which a Customs broker is used against those

for which a Customs broker is not used in order to measure the compliance level and to

reward compliant brokers through various initiatives including the provision of additional

benefits under trusted traders programmes (e.g., authorised economic operators

programme).

ii. Demerit System

87. A Customs brokers’ demerit system could primarily be based on awarding negative points

for non-compliance based on the severity of the offence and taking measured and

proportionate corrective measures including penalties such as warnings, suspension and

cancellation. This can help in continued monitoring and achieving better oversight with

brokers being fully aware of their compliance history and associated points to enable them

to improve. The objective of such a system is to increase the level of trust from the

business community and to have a more systematic and efficient performance

management system, rather than penalizing Customs brokers. For each offence

committed by a broker, specified demerit points are imposed, and once the aggregate

demerit points reach a certain level, either a warning is issued to enable the broker to

improve (if the explanation was found satisfactory by the competent body/administrative

committee) or the broker’s licence is suspended.

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88. A potential area of importance for improving compliance is training and capacity building to

support Customs brokers. Customs administrations should carry out such activities, with

the support of other government agencies, Customs brokers associations, and other

bodies.

V. Trade Facilitation and Cooperation between Customs and

Brokers: Building Trust while Improving Efficiency and Compliance

89. Customs brokers are uniquely positioned to contribute to Customs Administrations’

objectives relating to efficiency and compliance, both as a party with whom the

Administrations directly engage and as a communication agent. Integrity and the related

principles of predictability and accountability must be supported by private sector

knowledge and a good understanding of the rules that govern the cross-border movement

of goods. The establishment of effective communications channels through which issues

and concerns can be addressed without fear of negative repercussions is essential.

90. Customs brokers can play a pivotal role in advancing Customs modernization agendas.

They can support the promotion of trade facilitation according to international instruments,

tools and practices like the WCO Revised Kyoto Convention, the WTO Agreement on

Trade Facilitation, and related initiatives such as Authorized Economic Operator (AEO)

programmes, Coordinated Border Management and Single Window. Customs could

increase the role of brokers as a communicator and force multiplier to increase

compliance. Likewise, they are potential partners in curbing illicit trade including that of

counterfeited/pirated goods and in ensuring compliance with the regulatory requirements

of other government agencies.

91. Thought can equally be given to the role of brokers in enhancing the quality of data

submitted to Customs. Obviously, data quality is crucial for effective and efficient risk

analysis. One may argue that the trader often has better knowledge of and clearer

responsibility for the accuracy of the information set out in the declaration or other

submissions to Customs than the broker. However, the broker can raise awareness and

encourage their customers to improve data quality both in terms of accuracy and

adequacy. With their ability to gather, organize and manage commercial and trade data,

brokers can take reasonable and effective steps within their domain to provide accurate

and correct information.

92. Potential benefits of an active engagement process include improved service delivery;

improved supply chain security; enhanced compliance; enhanced facilitation; improved

data quality; improved revenue collection; reduced transaction costs; enhanced

professionalism, business ethics and integrity and more effective resource management.

a. Memorandum of Understanding

93. Co-operation and consultation between Customs and brokers can be enhanced through

Joint Customs/Trade Committees at national and local level, including participation in the

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national committee on trade facilitation (NCTF). Opportunities for cooperation and

associated frameworks are described in detail in the WCO Customs-Business Partnership

Guidance2 and the Guidance on NCTFs3.

94. At national level, such cooperation could be supplemented by a formal Memoranda of

Understanding (MOU) between Customs and Customs brokers, perhaps through brokers

associations, which would outline roles, responsibilities and mutual expectations.

b. Transparency Agreement

95. A transparency agreement between Customs and brokers (through brokers associations, for example) underlining the need for commitment to transparency by brokers, Customs,

and other users, may be considered an option. Such a transparency agreement between

Customs and brokers could help to fight any sort of bad practice in either party’s domain.

c. Broker –Trader Vetting

96. This process involved two-way exchange/communication between the Customs brokers

and the trader which helped in carrying out background checks of traders, thus improving

compliance management benefiting both parties. To the extent possible, efforts can be

made to standardize the information that a broker could request from a trader who should

be mandated to provide it, in order to verify the importer’s identity. This standardization

would contribute to greater transparency and supply chain security.

d. Trusted Partners - AEO programme

97. Organizational or structural frameworks should underpin efforts to build a culture of

integrity through trusted partnerships. These frameworks can extend beyond the internal

workings of the Customs Administration to its stakeholders. Many countries have

implemented AEO programmes that support not just integrity but also transparency and

compliance goals, while enhancing supply chain security and efficiency. In the case of

Customs brokers, AEO requirements are often an addition to some requirements further to

those included in the licensing and regulatory requirements for Customs brokers already in

place. Customs administrations should include brokers in their AEO and other trusted

programmes. Some administrations have already included them their security and

compliance programmes as a secure and trusted partner and grant them additional

facilitation benefits.

98. As an example, the US Customs-Trade Partnership Against Terrorism (C-TPAT) has the

“Minimum Security Criteria for U.S. Customs Brokers” in place. US Customs brokers are

required to carry out a comprehensive assessment of their security practice based on C-

TPAT minimum-security criteria. The criteria acknowledge that the value of the Customs

2 http://www.wcoomd.org/en/topics/facilitation/instrument-and-tools/tools/customs-business-partnership-guidance.aspx

3 http://www.wcoomd.org/en/topics/facilitation/instrument-and-tools/tools/national-committee-on-trade-facilitation.aspx

http://www.wcoomd.org/en/topics/facilitation/instrument-and-tools/tools/customs-business-partnership-guidance.aspxhttp://www.wcoomd.org/en/topics/facilitation/instrument-and-tools/tools/national-committee-on-trade-facilitation.aspx

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broker arises from the role played by them in the transmission of key trade data and as a

liaison between US Customs and Border Protection (CBP) and other key entities in the

supply chain. According to US CBP, “the broker’s key role for C-TPAT is to educate,

corroborate, and encourage that members within supply chains further the supply chain

security tenets of C-TPAT.” In addition to that role as an educator, Customs brokers must

also implement security policies and procedures regarding employee hiring and

monitoring, and access to physical premises, documents and IT systems.

99. Also worth consideration is the possibility that through an AEO Customs broker, small and

medium sized enterprises (SMEs) may be able to gain access to facilitated processes. By

using an AEO Customs broker, an SME that is not an AEO (as they may find it difficult to

meet all the AEO criteria and requirements) may be able to gain access to some of the

privileges available to AEOs thereby deriving benefit from, and delivering benefits to, the

Customs Administration through the SAFE Framework of Standards.

100. Because Customs brokers are already licensed by their governments/Customs in

countries where there are such requirements, and already have the authority to represent

their clients, the following strategic aspects should be taken into consideration when

looking to broaden the scope of Customs brokers’ purview to include trade security and

facilitation:

i. Scalability - Customs brokers have the ability to communicate AEO requirements and

benefits to SMEs with greater reach and reliability, since they deal with them on a more

regular basis

ii. Viability -- in order to ensure SMEs that cannot meet AEO standards remain viable

international traders, possibilities should be provided to them to receive some AEO

benefits if they use AEO-authorized Customs brokers, for example in Japan AEO

brokers’ benefits include the pre-arrival filing of an import declaration and the facility to

pay duties after the release of the cargo.

101. SME’s should be encouraged to qualify for their AEO status whenever possible. However,

Customs administrations should explore possibilities to expedite processes for traders who

do not qualify for AEO status, but whose Customs brokers and carriers have AEO status,

and for whom risk can be assessed in advance of goods’ arrival.

VI. Brokers’ Code of Ethics

a. Codes of Conduct

102. Customs brokers operate in an environment where expectations from both their clients

and the Customs Administration must be met in a complementary manner. It is, therefore,

critical that they operate transparently and with integrity.

103. In addition to the legislative framework that governs the practice of Customs brokerage,

Customs brokers often operate in accordance with a code of conduct that provides ethical

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guidelines vis-a-vis their relationships with clients, government authorities and other trade

chain partners. These codes cover things such as:

i. Personal conduct and professional practice

(a) The main duty of Customs brokers is to represent the interests of their clients, as long

as these are not in violation of the laws and regulations valid in the broker’s country.

(b) Customs brokers shall act according to the principles of morality, dignity, and integrity,

avoiding actions which might be considered disrespectful of the profession.

(c) Customs brokers shall perform their professional activity with competence and

responsibility, keeping professional confidentiality, fulfilling duties with respect to their

colleagues, clients, and Customs.

(d) Customs brokers should perform the legally required activities. They must meet

regulatory deadlines and requirements, and pay duties and taxes according to Customs and

other relevant laws.

(e) Customs brokers should seek the best possible legal solutions for the client.

(f) While promoting their professional interests and those of clients, Customs brokers must

not compromise their duties or obligations to Customs and other government agencies.

ii. Independence

(a) Customs brokers shall carry out their profession with objectivity. They will give a fair and

impartial opinion.

(b) Customs brokers’ relations with their clients' management or indeed anyone involved

within their professional sphere of activity, will not jeopardize the broker’s independence.

iii. Competence

(a) Customs brokers must apply all their knowledge inherent to the technical and

professional demands of the industry in order to facilitate services for clients.

(b) Customs brokers must have the ability to fulfill requirements and take advantage of

benefits for their clients. They should be prepared to defend and educate their clients when

dealing with Customs or other entities.

(c) Customs brokers should update their professional knowledge continuously. Employers

should provide opportunities for professional development and advancement of employees,

allowing them to maintain at all times the standards of competence expressed by the academic

and experience requirements for admission to the profession, and extending the effectiveness

of the profession through the interchange of Customs brokerage information and experiences.

iv. Professional confidentiality

(a) The Customs broker is subject to professional confidentiality and data privacy norms.

(b) The Customs broker is obliged to ensure his employees adhere to the abovementioned

principles.

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v. Advertising restrictions

(a) Customs brokers can publish any information about their professional activity as long as it

does not breach the rules of conduct, professional confidentiality and legal principles about

advertising and competition.

vi. Customs brokers duties within the brokers community

(a) Customs brokers shall act professionally and appropriately.

(b) Customs brokers shall respect the principles of fair competition.

vii. Customs brokers duties towards Government Agencies, Federations,

Associations and other entities

(a) Customs brokers shall act professionally in all their relations.

(b) Customs brokers should obey the rules, directives, and deliberations of their

professional organizations and associations, if they are members of such organizations.

b. Agreements between Customs Brokers and their Clients

104. In combination with ethical guidelines, Customs brokers in many countries also enter into

formal contractual arrangements with their clients. These agreements are often referred to

as agency agreements (AA) or powers of attorney (POA). Reflective of national contract

law and services to be provided by the Customs broker, an AA or POA clearly identifies

both parties, specifies the services that the Customs broker is authorized to undertake on

the client’s behalf and includes legal and authorizing signatures.

105. An additional companion document may contain the Standard Trading Conditions (STC)

which governs the business practice of the Customs broker. Such documents are typically

“Standard” because they are drafted for common use although they may be altered by the

parties entering into the agreement. STC may contain policy and procedural details

regarding:

a. Fees and Disbursements

b. Invoicing and Payment

c. Advancement of Funds and Disbursements

d. Duties and Responsibilities of the Client

e. Duties and Responsibilities of the Customs Broker

f. A Limitation of Liability

g. Termination and a reference to liabilities

h. Confirmation of the Governing Laws

106. In more complex working partnerships, a Customs broker and client may also choose to

agree upon Standard Operating Procedures (SOP) that reflects the responsibilities and

expectations of both the client and the Customs broker. An SOP clearly defines their

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respective roles. The information contained within an SOP should be client specific and

validated against actual operational procedures once business is underway. The

consistency of application and adherence to the instructions should be assessed.

107. The following are some elements that might be included in a SOP :

a. Release and Entry (i.e. what procedures should be following when supporting

documentation is missing, including specified procedures by transport mode).

b. Indication of any special process that may apply and instructions as they pertain to

demurrage charges.

c. Instructions relating to database management and responsibility for tariff classification of

new commodities.

d. Management of certificates and permits.

e. Invoicing and payment terms.

f. Procedures including timelines and responsibilities for Post Entry Adjustment.

g. How IT solutions will be employed.

h. A review mechanism.

c. Industry Guidelines and oversight

108. Besides the legal and regulatory framework, the evolving trade environment requires

improved service delivery, professionalism, ethics and a self-regulation mechanism for

brokers. Customs brokers and freight forwarders associations, on their own or in

collaboration with Customs administrations should develop business guidelines

concerning professional standards and an industry code of conduct (dos and don’ts) to

enhance the service delivery standards of brokers.

109. Industry bodies and associations can also develop model service delivery codes as a guiding principle and aspirational service model for brokers. In addition, an

industry/association-led oversight body can be set up to monitor the professional conduct

of brokers with its own set of rules to deal with delinquent brokers that may include

dismissal from its membership.

VII. Fees and Charges

110. Fees and charges for Customs broker services should be determined by free market

principles. However, in some countries, it is either fixed or monitored in some way (e.g.

setting minimum fees) by a government authority, mainly the Customs department (and in

some instances together with a private sector body) to protect the interest of traders as

well as brokers.

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111. As a means of maintaining appropriate levels of service to clients and the standard of

performance expected by the Customs Administration, Customs brokers should uphold the

principle of adequate compensation for Customs brokerage services, within acceptable

business practices.

112. Customs brokers should not indulge in unfair competition between themselves and

restrain from overcharging or undercharging for the services rendered.

113. Invoices issued by Customs brokers should provide a breakdown of any charges paid to

Customs and other government agencies for services provided by them, i.e. after-hours

services, in addition to any amounts of duty, tax or other charges paid on the client’s

behalf.

VIII. Capacity Building

a. Knowledge Management

114. Licensing requirements, examinations, and training all support both Customs brokers and

Customs administrations because a lack of knowledge and training often leads to delays in

the goods declaration and Customs clearance processes. A lack of knowledge in Customs

procedures and the necessary documents as well as insufficient knowledge of harmonized

systems, can lead to avoidable errors that ultimately wastes limited Customs

administrations’ resources and creates backlogs and delays. It is recommendable that any

reform or modernization of Customs includes the provision of the necessary information

and training to Customs brokers.

115. Capacity building for Customs brokers underpins their continued compliance and up-to-

date knowledge management. This is an area which provides huge opportunities for

cooperation between Customs and brokers, by leveraging respective resources and

expertise. In some countries Customs administrations and/or other government bodies

support the training and professional skill development of Customs brokers through their

Customs colleges and training schools. While in others, Customs brokers associations

provide training and professional development programmes. Academia too can play an

important role - colleges, universities and specialized training schools also offer courses to

Customs brokers to enable them to maintain and upgrade their knowledge.

116. The knowledge and skills required in Customs brokerage are best acquired and developed

through a combination of academic and experiential learning that is ongoing throughout an

individual’s career. The academic curriculum can be delivered through :

i. Classroom learning

ii. Online learning

iii. A combination of classroom and online learning.

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117. Requirements and features unique to classroom learning include :

a. a well-defined curriculum developed in coordination with Customs, brokers associations, and academia

b. instructors/experts from Customs and the private sector who are knowledgeable about all elements of course content and who are trained to deliver technical information in a classroom setting, with consistent quality delivery

c. less flexible than online learning d. ease of exchange between instructor and students and among students themselves.

118. Requirements and features unique to online learning include:

a. technology with appropriate software to host the course content b. delivery on the internet/intranet or other media c. instructors/experts from Customs and the private sector who are knowledgeable about

all elements of course content and who are trained to respond to student inquiries regarding content and to deliver content online using various tools

d. highly flexible for those who are also working full or part time e. interaction can be facilitated through webinars and discussion forums

Assessment of Knowledge

119. Typically, Customs knowledge is assessed by a written examination. Examinations could

be used as part of the curriculum as well as for periodic testing of knowledge, aside from

initial licensing requirements. The use of case studies allows for an assessment of applied

knowledge. Further, the use of multiple choice questions ensures both consistency and

ease of marking as a way for continual assessment.

Work Experience 120. Customs broker trainees/employees will better understand the application of the academic

content when given the opportunity to apply their learning in an operational environment.

This can be achieved through the integration of work terms within a course of study or a

work experience requirement either before or as a capstone to the course work.

Content Development and Course Delivery

121. Content is best developed by subject matter experts from brokers’ associations/bodies,

Customs and academia in partnership with experts in the areas of curriculum design and

delivery. The subject matter experts should have knowledge of both the subject matter and

the application of that knowledge by Customs brokers. A Customs Administration and

broker association may choose to develop and deliver the course(s) in-house or they may

choose to outsource or use a combination of both approaches. A key consideration must

be the level of expertise and the ongoing availability of resources.

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b. Professional Development

122. Customs broker services need to evolve in order to keep pace with changing commercial and regulatory environments in the international supply chain. Like any other professional service, Customs brokers are required to provide added value for their customers, whilst supporting Customs/governments in enhancing overall compliance with regulatory requirements, making supply chains transparent and secure.

123. Passing an examination is not a guarantee of continued expertise in the long term. To

support quality Customs work, those who provide Customs broker services either to their employer or clients should be required to continue their education and strive to evolve professionally. In some jurisdictions Customs brokers are required to participate in regular information sessions or advanced training on Customs-focused issues such as valuation or rules of origin and trade agreements.

124. Customs administrations, on their own or in partnership with private sector bodies, brokers associations and academia, should consider providing training support for Customs brokers. They can play a significant role in enhancing professional standards of Customs brokers by providing training that challenges their acquired knowledge and skills (e.g. electronic filing of declarations), while also teaching them new relevant knowledge/skills.

c. Joint Training

125. Organizing joint training for Customs officers and brokers can facilitate a common

understanding of rules and procedures and any associated amendments by both parties. It

can also help to bridge some gaps in understanding and dispel misconceptions, thus

leading to enhanced compliance and improved partnerships.

126. Customs administrations, along with Customs brokers and freight forwarders associations

can organize joint training sessions to build capacity among brokers and thus enhance the

effectiveness of clearance processes, in turn deepening the understanding of each other’s

perspective. Such joint training sessions can also focus on re-training/refresher courses at

regular intervals to keep knowledge and skills up to date.

d. Key elements of a capacity building framework

127. A framework for capacity building may have the following pillars :

a. The development of an administrative structure with appropriate policies and procedures

to support Customs broker management.

b. A means of educating a pool of individuals with subject matter expertise and relevant experience and a means of ensuring the ongoing professional development of those individuals.

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c. A means of training Customs officials in the practical application of licensing regulation for Customs brokers including a compliance management framework.

d. An ongoing strategy for Customs-Business consultation and information sharing including the setting-up of a Customs broker association, where needed, to support Customs brokers in meeting its obligations vis-à-vis regulatory authorities and importers/exporters.

e. A formalized evaluation and review plan.

e. Administrative Structure/Policies and Procedures

128. The tasks performed by the Customs broker management unit within a Customs

Administration will vary depending on whether the Administration chooses to be

responsible for developing and delivering Customs broker training and Customs broker

examinations in addition to its regulatory functions such as licensing, licence renewal and

performance monitoring and regulation. The following is a sample list of tasks that could

be performed or managed by Customs Broker Management Units:

i. Creating and updating course content, or reviewing course content drafted by external

partners, including brokers associations and academia (if the Customs Administration chooses to be responsible for this function)

ii. Creating examinations or reviewing examination content drafted by external partners iii. Registering applicants for courses and examinations iv. Delivering course content together with partners including brokers associations and

academia v. Organizing examinations vi. Marking examinations vii. Communicating examination results viii. Vetting licence applicants ix. Issuing/rejecting licences x. Monitoring Customs broker performance xi. Suspending or canceling licences/Other disciplinary measures xii. Renewing licences xiii. Managing consultations and communications essential to Customs Brokers and

importers/exporters xiv. Maintaining/publishing directory of those who have met and continue to meet the

licensing requirements 129. Once the list is developed, policies and procedures must be written for each task. In doing

so, administrative efficiency will be improved and those who interact with the Unit will be treated in a fair and transparent manner.

130. The policy governing the initial drafting and/or regular review of course content and

examinations should include the hiring of subject matter experts both from within the Customs Administration and externally to ensure that the content properly reflects the knowledge needed to ensure compliance with import and export requirements and reflects the operational realities of the business environment.

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131. Once the course content is finalized, the course will need to be promoted to potential

students. Registration forms are required and a process should be put in place. Applications must be received and reviewed and there must be communication with the applicants. The application process must be documented.

132. Depending on the method of course delivery, policy will need to be developed to support it.

Regardless of the delivery method, there will always be a need for an administrative policy covering matters such as tuition fees, the successful pass mark, how to withdraw from a course, and how to re-take a course after failing to pass.

133. Having an examination policy in place is also critical as the administration and marking of

exams must be beyond reproach. Policy outlining who is involved in the setting, supervision and marking of examinations, the communication of examination results, and the procedures that will be followed can make or break the legitimacy of the educational requirements associated with Customs Broker Management.

134. The same principles may apply to licence application and associated examination

requirements, if any. The rules governing how to apply, how to pay the licensing fee, how the applications are reviewed, how the decision is made on whether or not a licence will be issued, how rejections can be appealed – all these procedures must demonstrate and ensure the integrity of the process.

135. The standards associated with Customs broker performance, once set, must be made

public. These standards apply to the scope of practice, and relate to the obligations that Customs brokers have vis-à-vis their clients, Customs Administrations, and other government authorities. The policies relating to the suspension or cancellation of licences or other disciplinary measures must not only be clear but must also contain provisions for appeal.

136. Licence renewal will generally be a straightforward process but must be connected

procedurally with the monitoring of Customs broker performance. Additionally, the procedures for applying for renewal should be published along with information about the related fees.

137. It may also be worth considering developing a policy in order to define procedures for

consultation and communications with Customs brokers and importers/exporters, as an integral part of compliance and facilitation initiatives. Such policies benefit the Customs Administration on many fronts; business engagement is facilitated; the level of compliance is improved and business sees an official commitment from Customs to the Customs-Business partnership.

138. There might also be a need lay down procedures regarding the publication of a directory of

licensed brokers so that clients can readily verify the qualifications of those who might promote themselves as holding those qualifications. This will also curb malpractice related to unlicensed and informal brokers.

139. Initially, significant policy and procedural drafting that needs be done to support Customs Broker Management. Over time, the work will become more operational and evaluative.

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140. A Customs Broker Management Unit should make the most of the technology as it may not be possible to increase the staff numbers in line with increasing numbers of potential applicants attending courses and applying for licences.

f. Training Customs officials in the practical application of Customs broker regulations

141. The skill set and attitude required by those who will administer the Customs Broker Management Unit, once the policies and procedures have been drafted, will be different from that associated with many other staff positions. Strong administrative and organizational skills are required, together with the drive to work cooperatively with businesses in a fair and transparent manner. These officers must also have an interest in better understanding the challenges faced by new businesses and in supporting compliance through continual information sharing and client outreach programmes.

142. In particular, those who lead stakeholder consultations must have experience in agenda-

setting and in facilitating/encouraging open discussions. They must be able to work with business to identify strategies and objectives which further compliance and facilitation objectives.

143. The private sector can make a unique contribution to capacity building for Customs. This

contribution can be made by all businesses regardless of size or focus. Integrity and efficiency can both be enhanced by engaging with business representatives although the quality of the interaction will determine the extent of the improvements. A Customs Broker Management Unit is uniquely positioned to act as the main facilitator of professional development, joint training, information sharing and consultations.

144. Information sharing is the foundation of capacity building within a Customs-Business

relationship. If changes that affect Customs operations are not shared with business, compliance is unattainable. There cannot be an expectation of compliance without the ease of access to the rules with which businesses must comply, and clarity on those rules. Even the most significant improvements in Customs standards will have limited benefit if there is no positive impact on business. While not all changes initiated by a Customs administration will have an impact on business, broader economic benefit will only be possible where there is an opportunity for business to take advantage of such changes.

145. There are many different ways that the necessary information can be shared with

business. Fundamentally, when any change is contemplated, whether resulting from a domestic decision, a bilateral or multilateral trade agreement, from within Customs or elsewhere, the following questions must be asked:

“Who might be affected by this proposed change?” “Could consultation with stakeholders help in our decision-making?” “Will Customs brokers and other traders require this information in order to be compliant with Customs and other requirements?”

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“If consultation is needed, how can such consultation be made most efficient and effective?”

146. Stakeholders should be asked for their opinion regarding the best ways to communicate

with them. These might include any of the following initiatives:

1. Email notifications 2. Text messages for information that is of immediate concern, such as checkpoint closure,

or other border disruptions 3. Posting of information on a website with an RSS (Rich Site Summary) feed for those

who want the information 4. Communication via social media 5. Posted notices at border points 6. Seminars for topics that require more in depth discussion – where there is interpretation,

for example. 7. Joint training where Customs brokers and Customs officials le